Tuesday, March 24, 2009

Smith's misstatement could lead to PR fiasco

I read a post on the NASCAR Insiders site yesterday that opened my eyes a little. I had read the blurb about Lowe's Motor Speedway president Marcus Smith's status as a graduate from the University of North Carolina at Chapel Hill and much like everyone else thought, "that's interesting" with a little chuckle and moved on.

But after a couple of days - and not seeing this story touched after the initial coverage of it - I started to wonder why the story doesn't warrant more follow up from the media hordes that follow NASCAR on a weekly basis. Particularly since Bristol is an SMI track and we all know how Bruton Smith loves to work the media during his race weekends. (Although, strangely, there was a distinct silence from the Smith camp over the weekend at Bristol...)

You can try to dismiss the inclusion of the word "graduate" in any communication from SMI, whether it's a press release or its annual report, as an oversight. That's possible, but that also assumes no one that proofread those communications (including, presumably Marcus Smith himself) found the mistake. Having crafted hundreds of press releases myself, I generally have as many sets of eyes look at it as possible before I send something out to the media. Whether it's a client catching something they'd like changed or a colleague who finds a typo, I have had numerous errors fleshed out and changed before I hit the send button.

Once, embarrassingly, I confused a sponsor's name with that of a competitor's product. Both were similarly named, and unfortunately, I didn't catch it until it was sent. I fell on the sword and sent out a revised release with a note of correction and an apology. I didn't misrepresent any fact, but I did make a factual error. It falls upon the writer to correct it, and I did.

I also know people who spend months working on annual reports for publicly traded companies. Every fact - whether it's a financial statement or a statement of someone's credentials - is looked at intensely and verified over and over. The SEC does not like to see mistakes in these filings and there is a large team of people whose only job through most of the winter is to ensure the information in that report is one-hundred percent accurate. Not 99.9%.

SMI is a public company. I don't pretend to understand any of the rules that govern how they can communicate with the public (there are complex rules because anything they say can influence their stock price). However, I do know that misrepresenting facts in a press release or an annual report can cause the company serious problems such as fraud charges and huge fines from regulators.

It may be a simple mistake. And those are the easy kinds to fix. Simply send out an update to the media with a quote from Marcus Smith saying "we goofed up, I did not graduate although I attended for four years and completed all of the requirements for graduation. I simply did not file the paperwork and did not participate in the graduation ceremony." Boom, done. Simple as that.

As someone who did file the paperwork and did participate in a college graduation ceremony, I can tell you it's not something you would forget. Of course this was back in the day prior to Internet access, so I had to wait in long lines to file the paperwork so maybe that's why I remember it, but if you ask me I can tell you that yes, I did graduate.

I wouldn't have to go back and have to ask the University of Toledo for any sort of clarification. Smith not giving an answer and saying he was "checking with the university" seems shady and disingenuous. If one of the loud voices in the media center wanted to pick this one up and run with it, it could become a major PR disaster for the track and SMI as a whole.

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